This year, the net investment income of UAPF depositors exceeded 654 billion tenge
The amount of pension savings of depositors of the Unified Accumulative Pension Fund as of June 1, 2021 exceeded 12.7 trillion tenge. As you know, this amount includes pension contributions and investment income.
It is important to note that only in the five months from January 1 to June 1, 2021, net investment income in the amount of 654.2 billion tenge was accrued to the accounts of UAPF depositors, which is 155 billion tenge or 31% more than in the five months of last year. The yield on the pension assets of the UAPF under the management of the National Bank of the Republic of Kazakhstan since the beginning of the year was 5.3%, with inflation of 3.5%. At the same time, the yield for the last 12 months was 11.7%, while inflation for the same period was 7.2%.
Recall that the amount of pension savings of depositors (recipients) is recalculated and re-evaluated weekly in accordance with the results of investing pension assets. Investment income includes income in the form of remuneration on securities (deposits and other transactions), income in the form of market revaluation of financial instruments, income in the form of currency revaluation, income on assets under external management, etc.
In general, the investment income provided by the National Bank since the merger of all pension assets into the UAPF amounted to more than 5.3 trillion tenge. As of June 1, 2021, the share of net investment income in the total amount of pension savings is 36.1%.
If we take the period from the date of the foundation of the most accumulative pension system in Kazakhstan in 1998, the net investment income exceeded 6.2 trillion tenge. The investment yield for this time with an increasing total was 640.01%. At the same time, the inflation rate was 517.53%. Thus, the real return on pension assets for the period from the beginning of the accumulative pension system until June 1, 2021 amounted to 122.48 %.
It is worth emphasizing that pension savings are long-term investments and it is advisable to analyze the amount of investment income for a period of at least 1 (one) year. Short-term data (weekly, monthly, etc.) are not indicative, because they depend on constant changes in market conditions.
The entire system of investment management and accounting of pension assets is transparent: each depositor has the opportunity to see his investment income in his personal account on the enpf website.kz or in the mobile app. Information on the investment management of the pension assets of the UAPF and on the financial instruments in which the pension assets of the UAPF are placed is published on the official website of the UAPF (www.enpf.kz) in the section " Indicators/Investment activity".
In addition to the National Bank, UAPF depositors can transfer part of their savings to Investment Portfolio Management Companies (IPM). At the moment, the UAPF has concluded an agreement on the trust management of pension assets with four UIPS. You can get acquainted with the information about them and study their investment declarations on the enpf website.kz in the "Services" section - "Register of investment portfolio managers".
Recall that after receiving pension assets from the UAPF, the UIP invests them in authorized financial instruments specified in the Rules for Managing the Investment Portfolio, approved by Resolution No. 10 of the Board of the National Bank of the Republic of Kazakhstan dated February 3, 2014, and provided for in the Investment Declaration of the UIP.
According to the Law on Pension Provision, UIPS have the right to charge a commission for investment management. The maximum amount of the UIP remuneration may not exceed 7.5% of the received investment income. The actual amount of the commission fee is approved annually by the management body of the UIP and can change no more than once a year.
During the period when pension savings are under the management of the National Bank until the depositor reaches retirement age, a guarantee of the safety of pension savings, taking into account the level of inflation, is valid. When transferring pension savings to the management of the UIP, the state guarantee is replaced by the guarantee of the management company to ensure a minimum level of profitability of pension assets. The minimum level of profitability is calculated based on the weighted average yield of pension assets transferred to the management of a UIP operating on the market.
It should be noted that the pension assets held in the trust management of JSC "Jýsan Invest" have shown a yield since the beginning of activity (and this is March 15, 2021) at the level of 4.7%. The yield of pension assets held in trust by JSC "Halyk Global Markets" for the same period is 1.6%; JSC "BCC Invest" is 2.3%. At the same time, inflation for the period was 3.5%. Centras Securities JSC has been managing pension assets since April 1, 2021, during this time the investment yield was 2.5%, with inflation of 3.5%.